TEDxCanberra
Thomas Pogge: Medicine for the 99 percent
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Sad but true: Many of the cures and vaccines our world desperately needs -- for illnesses millions of people have -- just aren't being produced or developed, because there's no financial incentive. Thomas Pogge proposes a $6 billion plan to revolutionize the way medications are developed and sold.
Thomas Pogge - Philosopher
Philosopher Thomas Pogge wants to ensure medications get to those who need it most. He has published on a wide range of subjects such as global justice and human rights. Full bio
Philosopher Thomas Pogge wants to ensure medications get to those who need it most. He has published on a wide range of subjects such as global justice and human rights. Full bio
Double-click the English transcript below to play the video.
00:09
I hope you're all healthy,
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and I hope we will all remain healthy
for the indefinite future.
for the indefinite future.
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But that hope is a little bit unrealistic,
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and so I've got a second back-up hope.
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The second back-up hope is that,
insofar as we have health problems,
insofar as we have health problems,
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we will have good medicines
to take care of them.
to take care of them.
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Medicines are very cheap to produce
and they're very effective --
and they're very effective --
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much more pleasant, actually,
than the alternatives:
than the alternatives:
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hospitalization, operations,
emergency rooms, the morgue ...
emergency rooms, the morgue ...
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None of these are good things.
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So we should be very grateful
that we have pharmacologists around,
that we have pharmacologists around,
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people who research these things
and develop new medicines.
and develop new medicines.
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And we should be grateful
that we have a pharmaceutical industry
that we have a pharmaceutical industry
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that supports their activities.
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But there is a problem,
and you can tell from the fact
and you can tell from the fact
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that the pharmaceutical
industry isn't well-loved.
industry isn't well-loved.
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In fact, in terms of popularity, they rank
just about with the tobacco companies
just about with the tobacco companies
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and the arms manufacturers.
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So that's the problem
I want to talk with you about today.
I want to talk with you about today.
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How would you organize
the pharmaceutical industry?
the pharmaceutical industry?
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If we did it all over again,
how would you do it?
how would you do it?
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I think we would think
of three main principles.
of three main principles.
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The first one is:
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we want patients to have access
to all the important medicines.
to all the important medicines.
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Remember, these things
are very cheap to produce.
are very cheap to produce.
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So everybody in the world
should have access
should have access
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to all the important medicines.
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Secondly, we want innovative activities,
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the research and development
that pharmaceutical companies do,
that pharmaceutical companies do,
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to track the diseases that are
the most important, the most damaging.
the most important, the most damaging.
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We want them to aim
for the greatest health impact.
for the greatest health impact.
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And thirdly, we want
the whole system to be efficient.
the whole system to be efficient.
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We want as little of the money
that goes into the system to go to waste,
that goes into the system to go to waste,
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to go for overhead,
for red tape, and so on and so forth.
for red tape, and so on and so forth.
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Very simple three points.
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Now what about the existing system?
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I think it does poorly
on all these three counts.
on all these three counts.
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First, universal access: forget about it.
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The vast majority of human beings
do not have access to medicines,
do not have access to medicines,
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at least while they're still under patent.
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There are extremely high markups,
and that's the problem.
and that's the problem.
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The problem is that even though
these medicines are very cheap to produce,
these medicines are very cheap to produce,
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they cost a great amount of money
during the time that they're under patent,
during the time that they're under patent,
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and the reason for that is
that rich people can pay a lot of money.
that rich people can pay a lot of money.
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Pharmaceutical companies
have a temporary monopoly;
have a temporary monopoly;
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they price for the rich,
they forget about the poor.
they forget about the poor.
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The second problem is innovation.
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Again, we don't focus on the diseases
that do the most damage,
that do the most damage,
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and that's often put
into the phrase "the 10/90 gap."
into the phrase "the 10/90 gap."
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Ten percent of all the money spent
on pharmaceutical research
on pharmaceutical research
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is focusing on diseases
that account for ninety percent
that account for ninety percent
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of the global burden of disease.
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And vice versa -- ninety percent
of the money is spent on diseases
of the money is spent on diseases
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that account for only ten percent
of the global burden of disease.
of the global burden of disease.
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So there's a huge mismatch between
where we spend the research money
where we spend the research money
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and where the greatest problems are.
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Now, both these problems --
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the problem with innovation
and the problem with access --
and the problem with access --
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have to do with this:
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the distribution of money in the world.
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It's extremely unequal.
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The blue area here is the top quarter
of the human population.
of the human population.
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They have more than ninety percent
of the global household income.
of the global household income.
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The bottom half of humanity,
on the other hand,
on the other hand,
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has not even three percent
of global household income.
of global household income.
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So if you're a pharmaceutical company
and you look for profit opportunities,
and you look for profit opportunities,
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you look at this sort of chart and say,
"Where's the money?
"Where's the money?
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What am I going to research?
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Who am I going to provide with medicines?"
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And again, that is in the context
of there being only one way
of there being only one way
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in which pharmaceutical companies
make money under the present system,
make money under the present system,
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that is, through patent-protected markups.
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That's how they make their money,
through markups.
through markups.
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And if you make money through markups,
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then obviously, you will go to where
the people have the most income.
the people have the most income.
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Now in terms of overall efficiency,
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the system also does very, very poorly.
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A lot of money goes
for lobbying politicians
for lobbying politicians
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in order to extend patent periods --
to "evergreen," as it's called.
to "evergreen," as it's called.
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Data exclusivity and so on.
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A lot of money goes for gaming,
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where brand-name companies pay generic
companies to delay entry, for example.
companies to delay entry, for example.
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A lot of money goes to take our patents
in all the different jurisdictions.
in all the different jurisdictions.
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Money goes – even larger
amounts – for litigation.
amounts – for litigation.
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They're litigating endlessly --
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brand-name company
against brand-name company,
against brand-name company,
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brand-name company
against generic company ...
against generic company ...
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Enormous amounts go there.
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People say pharmaceutical companies
make a lot of profit.
make a lot of profit.
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Well, yes and no; they do, but a lot of it
goes to these wasteful activities.
goes to these wasteful activities.
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Deadweight losses -- I won't
even tell you what they are,
even tell you what they are,
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because it's too complicated.
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But there's also wasteful marketing.
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A lot of the money
that pharmaceutical companies make
that pharmaceutical companies make
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goes into advertising campaigns,
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trying to win favor with doctors,
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trying to persuade patients
to try this medicine.
to try this medicine.
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And these marketing battles,
of course, are a pure waste,
of course, are a pure waste,
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because what one company spends
to get patients over to their drug,
to get patients over to their drug,
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another company spends to win them back.
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And then there is counterfeiting
in the developing countries.
in the developing countries.
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A lot of the drugs there, often more than
fifty percent of what's sold,
fifty percent of what's sold,
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are counterfeit drugs, where people say,
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"Because the drug is so expensive,
I can offer you a cheaper version."
I can offer you a cheaper version."
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But of course it's not the real thing,
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it's either diluted
or it's completely inert.
or it's completely inert.
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So on the whole, all the money
that is spent on pharmaceuticals --
that is spent on pharmaceuticals --
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and it's roughly a trillion dollars
now, per annum --
now, per annum --
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much of that money
is absolutely going to waste,
is absolutely going to waste,
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it's not going to where
it should be going,
it should be going,
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namely, to the development
of new medicines
of new medicines
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and to the manufacturing
of ones that we already have.
of ones that we already have.
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Now, many people think
that the solution to the problem
that the solution to the problem
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is moral pressure
on pharmaceutical companies.
on pharmaceutical companies.
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And, sure -- pharmaceutical companies
have moral obligations,
have moral obligations,
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just like we do.
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When we have to make a choice,
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often between having a little extra money
and saving a human life,
and saving a human life,
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we often feel that we have a duty
to spend the money
to spend the money
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and save the life.
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And why should pharmaceutical
companies be any different?
companies be any different?
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But really, it isn't realistic
to expect pharmaceutical companies
to expect pharmaceutical companies
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to act as well as you
or maybe I might act.
or maybe I might act.
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And the reason is threefold.
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One is that pharmaceutical companies
are bound to their shareholders.
are bound to their shareholders.
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The executive of such a company
wouldn't last very long
wouldn't last very long
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if he gave a lot of money away,
or she, for good purposes,
or she, for good purposes,
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and thereby lost money
for the shareholders.
for the shareholders.
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They would be replaced.
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Also, pharmaceutical companies stand
in fierce competition with one another,
in fierce competition with one another,
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and if you do more, if you are nicer
than the other company,
than the other company,
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sooner or later, you'll be
driven out of the market.
driven out of the market.
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You will not survive.
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The other company will gain market share.
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And finally, remember --
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the entire industry
is dependent for its income
is dependent for its income
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on one thing and one thing only: markups.
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And ultimately, you have
to be sustainable.
to be sustainable.
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If you spend a lot of money
on helping poor people
on helping poor people
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and you don't get paid for it,
and you lose this money;
and you lose this money;
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you cannot continue
with your innovative activities.
with your innovative activities.
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So for these reasons,
it's just unrealistic
it's just unrealistic
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to expect that pharmaceutical companies
will solve the problem
will solve the problem
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on moral grounds.
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Who, then, should solve the problem?
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I suggest it has to be us.
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We, citizens and politicians,
have to do better
have to do better
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in terms of regulating
the pharmaceutical industry,
the pharmaceutical industry,
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focusing them,
giving them the right incentives,
giving them the right incentives,
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focusing them on the problems
that really matter.
that really matter.
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The potential gains here are enormous.
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About one third of all deaths
each day, each year,
each day, each year,
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are due to the diseases of poverty
in the developing world.
in the developing world.
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Fifty thousand people every day
die prematurely from these diseases.
die prematurely from these diseases.
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And that's not even counting
all the diseases
all the diseases
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that we know only too well
in the rich countries:
in the rich countries:
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cancer, heart disease and so on.
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Again, poor people die often much earlier,
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because they don't have good medical care,
including good medicines.
including good medicines.
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And even in rich countries, many patients
are not getting the best medicine.
are not getting the best medicine.
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That's sometimes due to the fact
that insurance companies won't cover it,
that insurance companies won't cover it,
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because the price
is so absolutely ridiculous.
is so absolutely ridiculous.
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And it's also due, sometimes,
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to the fact that doctors
and patients are falsely influenced
and patients are falsely influenced
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by advertising campaigns
of pharmaceutical companies.
of pharmaceutical companies.
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So what can we do?
How can we change the system?
How can we change the system?
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I want to show you a way
in which we can better incentivize
in which we can better incentivize
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pharmaceutical innovation and
the provision [of] medicines
the provision [of] medicines
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to poor people and rich alike.
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And that is the Health Impact Fund.
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The Health Impact Fund is basically
opening up the second track
opening up the second track
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with which pharmaceutical innovators
can be rewarded for their activities.
can be rewarded for their activities.
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They have a choice.
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They can either go with the old system,
with patent-protected markups,
with patent-protected markups,
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or they can go with the new system,
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being rewarded on the basis
of the health impact
of the health impact
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of the medicines that they develop.
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And with each particular medicine,
they have their choice.
they have their choice.
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So they can be partly on one track,
partly on the other,
partly on the other,
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with different products.
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Now, how would
the Health Impact Fund work?
the Health Impact Fund work?
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There would be a fixed
reward pool every year.
reward pool every year.
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We start with maybe six billion dollars,
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but that can eventually be revved up.
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Remember that the total money
that the world spends on pharmaceuticals
that the world spends on pharmaceuticals
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is a trillion.
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So it's a thousand billion;
six billion is a drop in the bucket.
six billion is a drop in the bucket.
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It's relatively small,
but it would work with six billion,
but it would work with six billion,
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and we'd get a lot of bang for the buck
if we introduced the Health Impact Fund
if we introduced the Health Impact Fund
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with just six billion dollars.
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If you have a product
and you want to register it
and you want to register it
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with the Health Impact Fund,
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you will be rewarded
for a period of 10 years.
for a period of 10 years.
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During these 10 years, you get a share
of these annual reward pools.
of these annual reward pools.
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That share would be proportional to
your share of the health impact achieved
your share of the health impact achieved
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by all these registered products.
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So if your product accounts
for eight percent of the health impact
for eight percent of the health impact
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of all the registered products,
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you get eight percent
of the reward money that year.
of the reward money that year.
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That repeats for 10 years,
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and at the end of the 10 years,
your product goes generic,
your product goes generic,
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so you basically lose
any further income from it.
any further income from it.
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Each year, the health impact
from your product would be evaluated,
from your product would be evaluated,
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and you would be paid on that basis.
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Now, if you take that reward
from the Health Impact Fund,
from the Health Impact Fund,
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you can't claim the other reward,
you can't mark up the price.
you can't mark up the price.
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You have to sell at cost.
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What does that mean?
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Well, it doesn't mean
that the pharmaceutical company tells us
that the pharmaceutical company tells us
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what their cost is;
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but rather, our preferred way
of determining what the real cost is
of determining what the real cost is
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of making a medicine, of manufacturing it,
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is to ask the registrant to put
the production of the medicine
the production of the medicine
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out for tender, let generic companies
compete for the production,
compete for the production,
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and then the innovator would buy
the product from the cheapest supplier
the product from the cheapest supplier
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and would sell it at that same
lowest possible price to patients.
lowest possible price to patients.
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So the innovator would make no money
at all on selling the product,
at all on selling the product,
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but would make all its money
from the health impact rewards.
from the health impact rewards.
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Now, how do we assess the impact
of the introduction of a medicine?
of the introduction of a medicine?
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Well, we assess it relative
to the preceding state of the art.
to the preceding state of the art.
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So some people,
before the medicine came along,
before the medicine came along,
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had no treatment at all.
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Now for the first time, they have
treatment, because it's cheap;
treatment, because it's cheap;
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people can afford it.
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So here, the impact is the difference
between being treated
between being treated
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and not being treated.
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In other cases, the new product
is better than the old products,
is better than the old products,
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and so a person gets switched over
to a better product,
to a better product,
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and we pay for the impact,
for the difference the new product makes.
for the difference the new product makes.
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If you have a product
on the Health Impact Fund
on the Health Impact Fund
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and you simply switch somebody
from an existing product
from an existing product
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to another product, to your product,
and it's no better,
and it's no better,
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you get no money.
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That's in stark contrast
to the existing system,
to the existing system,
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where you get a lot of money
for switching somebody from one product
for switching somebody from one product
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to an equal product that is your product.
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The Health Impact Fund
does not pay for that.
does not pay for that.
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We quantify health impact in terms
of quality-adjusted life years.
of quality-adjusted life years.
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That method has been around
for about 20 years,
for about 20 years,
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and it's very easy to explain.
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Just think of a human life
as a kind of plank.
as a kind of plank.
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It's eighty inches long, one inch high.
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And when you die prematurely
before you reach 80,
before you reach 80,
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well, the plank is a little shorter.
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And if you're sick during
the time that you live,
the time that you live,
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the plank is a little bit thinner.
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And what diseases can nibble away,
medicines can restore,
medicines can restore,
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or medicines can avert
the taking away of these parts.
the taking away of these parts.
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And they get paid for that.
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That's the method, basically.
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Now, we look – of course,
each year, we have to assess.
each year, we have to assess.
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We have to spend
a considerable amount of money
a considerable amount of money
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looking at how these various medicines
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that are registered
with the Health Impact Fund
with the Health Impact Fund
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are doing in various countries.
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And here, statistics is extremely helpful.
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You all know how exit polling works.
This is a similar method.
This is a similar method.
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13:33
You look for a statistically
significant sample,
significant sample,
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13:37
and then try to figure out
what the health impact of the medicine is
what the health impact of the medicine is
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in different locations,
in different demographic groups ...
in different demographic groups ...
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And, of course, you look very carefully
at the actual world --
at the actual world --
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this is in contrast to how medicines
are today rewarded.
are today rewarded.
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Sometimes, there is a reward
based on performance,
based on performance,
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but it's the performance in clinical
trials, in the laboratory, if you like,
trials, in the laboratory, if you like,
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and not the performance in the real world.
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The Health Impact Fund
would look at real-world impact.
would look at real-world impact.
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It would look not just
at the quality of a drug,
at the quality of a drug,
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but also at how widely it is distributed,
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whether the innovator manages
to target those patients
to target those patients
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who can benefit the most,
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14:18
and also, how well the drug
is used in the field.
is used in the field.
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14:22
So innovators would have much
stronger incentives than they do now
stronger incentives than they do now
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to make sure that every patient
who takes the drug
who takes the drug
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knows exactly how to take it
to optimal effect.
to optimal effect.
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Today, most packaged inserts are not even
translated into local languages,
translated into local languages,
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14:37
and so it's not surprising that patients
don't make the best use of the product.
don't make the best use of the product.
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Now, how would the financing work?
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14:46
Basically, the Health Impact Fund,
as I said, could start
as I said, could start
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with something like six billion dollars.
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14:51
It's not nothing, but it's also
not a lot of money,
not a lot of money,
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compared to what the world is already
spending on pharmaceuticals.
spending on pharmaceuticals.
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14:56
So the best way to think of it
is as a new way of paying
is as a new way of paying
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for what we are already paying for,
namely, new medicines.
namely, new medicines.
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15:02
You pay with one hand
through the tax system,
through the tax system,
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15:05
but you get something back
with the other hand,
with the other hand,
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15:08
because you also get
these medicines for cheap.
these medicines for cheap.
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15:10
This is not just for poor people --
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15:12
everybody will have these Health Impact
Fund registered medicines at cost,
Fund registered medicines at cost,
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5087
15:17
at a very low price.
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15:20
One very important hurdle here,
politically, is that we have to make sure
politically, is that we have to make sure
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15:25
that we have long-term
visibility for innovators,
visibility for innovators,
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15:29
that innovators know
that the money is actually there,
that the money is actually there,
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15:31
and so we need governments
to fund the Health Impact Fund,
to fund the Health Impact Fund,
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because only governments can make
predictable commitments
predictable commitments
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for a long period of time.
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15:41
Because the Health Impact Fund
registration is voluntary,
registration is voluntary,
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you basically have
a self-adjusting reward rate.
a self-adjusting reward rate.
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As the rate rises too high,
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innovators will come in
and drive the rate down.
and drive the rate down.
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15:56
Conversely, if the rate falls too low,
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15:59
innovators would be reluctant
to register, and the rate will recover.
to register, and the rate will recover.
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So the rate will always be
at a reasonable level.
at a reasonable level.
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16:07
The Health Impact Fund
is beneficial for all parties.
is beneficial for all parties.
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It benefits innovators
by giving them a new market,
by giving them a new market,
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16:15
and most importantly, by overcoming
their public relations problems
their public relations problems
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that we started with.
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16:21
It benefits patients,
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16:22
because patients are much more likely
to get the right medicine,
to get the right medicine,
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16:26
and also for these
medicines to be developed,
medicines to be developed,
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16:29
the medicines that we most need.
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16:31
And it also benefits governments
or taxpayers, if you like,
or taxpayers, if you like,
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16:35
because it creates a permanent source
of pharmaceutical innovation
of pharmaceutical innovation
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that will be here for all future times.
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It's a kind of machine that always
directs pharmaceutical innovation
directs pharmaceutical innovation
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to where we have the greatest problems,
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maybe for diseases
that don't even exist yet.
that don't even exist yet.
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The Health Impact Fund
will always channel innovation
will always channel innovation
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in the direction where it's most needed.
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Now, we have a little bit of help already.
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You can see here the number of people
who have agreed to help us,
who have agreed to help us,
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3784
17:01
but we want your help as well.
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We want you to join us,
maybe to talk with your government
maybe to talk with your government
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to help us with publicity,
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to help us with your ideas in perfecting
the Health Impact Fund scheme.
the Health Impact Fund scheme.
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And what we most urgently need
for the moment
for the moment
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is to start a pilot.
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17:20
The pilot would introduce one medicine
into one jurisdiction
into one jurisdiction
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17:24
on the Health Impact Fund model.
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17:26
The innovator would get paid according
to the cost of the medicine for the sales,
to the cost of the medicine for the sales,
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17:32
and would then get additional money
on the basis of the health impact.
on the basis of the health impact.
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17:37
Here, we need funding for the rewards,
funding for the assessment,
funding for the assessment,
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1049286
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17:42
and in particular, we need
political support
political support
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1054772
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17:45
to get politicians to support
a pilot of that sort.
a pilot of that sort.
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17:51
If you have any further questions,
don't hesitate to write us
don't hesitate to write us
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and contact us at this address.
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Thank you very much.
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(Applause)
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ABOUT THE SPEAKER
Thomas Pogge - PhilosopherPhilosopher Thomas Pogge wants to ensure medications get to those who need it most. He has published on a wide range of subjects such as global justice and human rights.
Why you should listen
Originally from Germany, Thomas Pogge received a PhD in philosophy from Harvard in 1983. Since then, he has taught philosophy, political science, and ethics at universities around the world. His 2002 book, World Poverty and Human Rights, offers proposals on how to achieve global economic equality. In 2008, he co-authored The Health Impact Fund, which lays out the plan to make life-saving medicines accessible for everyone. He is currently Leitner Professor of Philosophy and International Affairs at Yale.
Thomas Pogge | Speaker | TED.com